Par Funding CEO Joseph LaForte Sentenced in $404M Fraud Case
- Staff Writer
- Mar 27
- 3 min read
The legal collapse of Par Funding has finally reached its most decisive moment. In March 2025, federal courts sentenced brothers Joseph and James LaForte to prison for their roles in a sweeping fraud that left thousands of investors misled, hundreds of millions lost, and an industry trying to recover from the damage to its reputation.
Joseph LaForte, the CEO of Par Funding (officially Complete Business Solutions Group), was sentenced to 15½ years in prison yesterday, March 26th, for racketeering conspiracy, securities fraud, and multiple tax offenses. His brother James LaForte, described by prosecutors as the company’s violent enforcer, received 11½ years for obstruction, threats, and extortionate collection practices earlier this month.
A $404 Million Scheme Disguised as Small Business Finance
Par Funding raised money from investors by touting high returns through merchant cash advances, also known as revenue-based financing, claiming their funding model was low-risk and insured. Investors were never told that Joseph LaForte had prior felony convictions for financial crimes or that he was secretly leading the company under aliases to avoid regulatory scrutiny.
According to a January 2025 court ruling, Par Funding caused an actual fraud loss of approximately $404 million, which was later reduced to $288,395,088 after accounting for seized assets and collateral.
The DOJ revealed that Par’s revenues were used not only to enrich its insiders — through luxury assets, real estate, and even a private jet — but also to fund the company’s extreme tactics in collecting from borrowers, including threats and physical violence.
More Than Just Bad Business
James LaForte, in particular, developed a reputation for crossing the line between aggressive collections and outright criminality. His conduct included threatening witnesses, assaulting a court-appointed attorney, and instilling fear in both borrowers and insiders alike.
While Par Funding’s fraud stood on its own as one of the most egregious in recent history, further allegations added even more gravity to the case. In a separate federal indictment out of Brooklyn, James LaForte was formally identified as a made member of the Gambino crime family. The indictment alleges he funneled over $1.5 million in proceeds from Par Funding to Gambino-controlled entities — a development that casts the company's operations in an even darker light.
Funder Intel previously reported on these links in an investigative piece by Shane Mahabir, who noted that industry rumors about “mob ties” went back at least back to 2018. At the time, those whispers were easy to dismiss. Today, they’re part of the public record.
Industry Outlook
While the sentencing of the LaForte brothers brings a measure of closure for victims (still awaiting if they will see their investments returned and how much), it also leaves lingering questions for the broader business funding sector.
How did a company of this size and reputation — appearing at industry conferences, partnering with sales offices, and raising over half a billion dollars from investors — manage to operate unchecked for so long?
Could this happen again now that there is more awareness and new commercial financing laws in several states?
The merchant cash advance/revenue-based financing/sales-based financing industry has always occupied a regulatory gray zone. But the Par Funding case makes clear that gray can quickly turn to black. Another example of a similar case was that of MJ Capital which ended in a 20-year prison sentence for its leader Johanna Michely Garcia for wire fraud committed in 2021.
The industry has normalized opaque practices, hidden leadership, or exaggerated investment returns but that shouldn't be tolerated, especially when they cover up criminal behavior.
Transparency, third-party oversight, and informed due diligence are not optional any longer. They are the minimum.
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